In its 20^th anniversary year, Hong Kong International Airport reported a 1.4% rise in retail licences and advertising revenue to HK$7,909m ($1,007m) – representing 36.0% of total revenue – driven by passenger growth of 4.5% at HKIA (for fiscal 2017, ended March 2018).

However, this was a less impressive result for the airport when compared directly with the prior year when the retail licences and advertising sector produced revenue growth of 3.7% and made up 41.9% of the airport’s total revenue.

Of course, HKIA has been undergoing a great deal of change in terms of its retail landscape following the highly publicised tender award to CDF-Lagardère Company Limited and Shilla Duty Free, with the latter inaugurating its store last week. TRBusiness understands that CDF will open its Duty Zero shop later this week.

“[The two companies] offer an innovative, engaging customer experience, with ‘magic mirrors’ for virtual make-up, a ‘new generation’ zone featuring emerging Japanese and Korean beauty brands, a whisky-tasting bar and an in-store VIP lounge,” said HKIA.

FREE DELIVERY ACROSS 15 MARKETS

“[This year] we also broadened HKIA’s retail mix with children’s wear, entertainment and lifestyle products. Our free delivery service grew to 15 markets, including long-haul destinations such as Australia, Canada and the United States.”

Shilla opened its ‘Beauty&You’ concept on 28 June.

As of October 2017 the airport widened its culinary mix, introducing hybrid shops that combine retail and food and beverage outlets and in July 2017, it launched an online platform, ‘HKairport Shop’, through which passengers order goods prior to leaving home, picking them up at HKIA.

“Passengers can buy over 1,500 products, including packaged food, beauty and skincare items, wine and electronics, around the clock,” insists HKIA. “Goods can be picked up at the airport as soon as three hours after purchase or delivered to addresses in Hong Kong.”

The airport is currently advertising several retail tenders for Terminal 1 as it undergoes a major renovation. “As HKIA continues to experience growing demand, we are undertaking a series of enhancement projects to ensure the airport has capacity to cater for the demand in the short- and medium-term until the three-runway system enters service,” said HKIA.

NEW RETAIL FOR TERMINAL 1

In-keeping with T1’s ‘fresh new look’, the airport will be adding a number of new shops and restaurants in the arrivals area.

A rendering of the new CDF/Lagardère store to open later this week.

In a statement, Fred Lam, the airport authority’s CEO, took the opportunity to thank HKIA staff members as well as the wider airport community: “2018 marks HKIA’s 20th anniversary. Over the years, HKIA has been recognised as the world’s best airport more than 70 times.”

HKIA first opened in 1998 at Chek Lap Kok, with a single runway (South), but the North runway opened just a year later.

“I would like to express my sincere thanks to the 73,000 members of the airport community and our business partners, whose efforts helped us deliver excellent results and the highest service standards again in 2017/18.”

HONQIAO PROJECT ENTERS THIRD PHASE

In its Annual Report, HKIA also revealed that the third phase of its joint venture project at Shanghai Honqiao Airport – which will see strengthened co-operation on flight movement management, service benchmarking and sharing of smart airport initiatives – started in 2018.

The joint venture between AAHK and Shanghai Airport Authority was established in 2009, controlling management of the terminal operations and retail business at Hongqiao International Airport.

In July 2017, HKIA launched an online platform, ‘HKairport Shop’, through which passengers order goods prior to leaving home for their flights and pick them up at HKIA.

In 2017, passenger throughput at Hongqiao airport increased 3.5%, to 41.9 million, while flight movements rose 0.6%, to 264,000. Hongqiao airport was named the Mainland’s best airport in the 2017 Skytrax survey.

“To sustain Hongqiao airport’s high service standards, Terminal 1 (T1) is being renovated. Enhancement works to Building B in T1 are progressing well and are expected to be completed in the third quarter of 2018,” added AAHK.